Going Public - By Dan Liebman

Having been unveiled at the Fasig-Tipton Florida sale of juveniles earlier this year, new video kiosks were used for the first time at a yearling sale July 20-21 at Fasig-Tipton Kentucky. And they were hugely popular.It is vitally important for prospective buyers to gain information while a sale is underway, and the video kiosks make that much easier.

After the bidding stopped on a Distorted Humor colt at $290,000, a few minutes later the screen showed—in high definition, by the way—the horse as not sold. Later, the RNA price was removed and instead the colt showed as a $225,000PS, meaning he had been privately sold (PS) back at the barn for that amount.

Kudos to Fasig-Tipton for not only using the video kiosks—which at the 2-year-old sale were able to show the under-tack works—but also for quickly displaying that a horse bought back by its owner had later been sold privately, and for how much.

More than 20 horses at the July sale later showed up as private sales, and their figures were included in the final totals for gross, average, median, and those not sold.

According to Boyd Browning, president of Fasig-Tipton, any horse reported to the sale company office as sold privately before the end of an auction’s final session will be changed on the result sheets.

The major reason for a consignor to do so, Browning said, is simple: “We then assume the credit risk.” But he was quick to point out nothing in the conditions of sale compels a private sale to be recorded, and many are not. As Browning noted, for example, an owner might sell 25% of a horse, a partner might decide to buy out another after a horse did not find a new buyer, or a person might trade an interest in one horse for an interest in another.

Once upon a time, this writer was against the reporting of private sales because of the belief a public auction should only reflect what happens in the ring. That thinking has changed, however, because the private sale of a horse while on the sale grounds still reflects a transaction between buyer and seller during the current marketplace conditions.

The only thing that would even further promote transparency at an auction is if both the RNA price and private sale price were shown on the hip-by-hip summary.Recording private sales obviously raises the gross, lowers the average and median, and reduces the number of horses listed as not having been sold. But it gives a more accurate picture of the business of trading horses at a particular sale.

Whether private sales at all Thoroughbred auctions should be similarly reported should be a matter for discussion at the next meeting of the Society of International Thoroughbred Auctioneers. It is hard to imagine a valid argument against doing so.

AT WHAT COST?

While the Fasig-Tipton July sale was happening, a long-time participant in the sport was helping a group develop a business plan for a new partnership. He wondered aloud how much it currently costs to keep a horse in training for a year. “Does $35,000 sound right?” he inquired.

That figure is usable, but in fact is probably low in many instances. This bloodstock agent was figuring a trainer’s day rate at $80, and that alone adds up to $29,200 over the course of a year. A figure of $35,000 may include such things as routine farrier and veterinary care, but it could not include things such as breaking and training, shipping, and insurance.

Of course, it is hard today to define “routine veterinary care.” More than anything else with the day-to-day training of horses, Thoroughbred owners complain loudly about the cost of veterinary care.

Watching yearlings go through an auction ring while contemplating how much it costs to keep a single Thoroughbred in training for a year and how much purses have fallen makes one realize further adjustments are needed on the balance sheet.